Yield Ahead? Some See a Flat Stretch

With the gap between short- and longer-dated Treasury yields narrowing to less than a quarter of a percentage point, the yield curve is looking more like a flat line.

Nonetheless, investors are intent on squeezing every last bit of profitability out of the curve-flattening trade, which is essentially a bet that two- and 10-year Treasury yields will converge. The pace of the flattening is likely to slow, as the difference between these...